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Air New Zealand’s outgoing CEO has said the airline should not have laid off so many employees during the pandemic as he prepares to leave his role.
Speaking exclusively to the Australian Aviation Podcast, Greg Foran, who will depart Air New Zealand in October, said that with the benefit of hindsight, one thing he would have done differently was to “burn more cash” rather than try to cut costs.
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The airline in 2020 cut around 4,000 jobs, or around 30 per cent of the company, in an attempt to reduce the wage bill by $150 million.
According to Foran, who took over as CEO shortly before COVID border closures forced an end to international flights, he learned to “panic slowly” and deal with the immediate situation.
“I think all of us had never experienced what it was like to shut down an airline, and nor had we experienced what it was like to start one up – and my learnings on that is that it’s a lot easier to shut it down than to start it up,” he said.
“So, some of these roles where we took headcount down, I just wouldn’t do that – for example, call centres and engineers. Now, we were lucky with our pilots that we were able to operate a furlough scheme, but there are areas in the business where the capability of the people is difficult to get and attain, and we would have been better holding onto that and earning a bit more cash.
“Number two, understanding that we weren’t the only ones in this ecosystem, and that other people in the supply chain, or OEMs were going to have difficulty. So making sure that you got in early, to ensure you got the fleet that you wanted early, they would be two that come to mind.”
While Foran regrets delaying Air New Zealand’s order with Boeing, which has pushed back the launch date of its new Skynest-equipped 787-9 Dreamliners to next year, he believes the airline made the right decision in getting rid of its 777-200s.
“We’ve often reflected on that. We’ve been short on fleet – should we have kept the 777-200s? Actually, our view on that is we made the right call, and the reason for that is it was increasingly difficult to maintain those engines and increasingly difficult to get parts for the interior of the planes,” he said.
Foran told Australian Aviation he believes his tenure was positive overall, and that the airline will be in a good position for his successor.
“Overall, I think the business is in good shape, and part of my legacy is not just leaving the business with some good physical assets … or getting some new planes delivered,” he said.
“It’s creating the culture in the business and the sense of growth and winning, that this business is left in good shape, not just for the next year or three years, but for the next 10 or 20 years.”
Foran, who joined Air New Zealand in 2019, replaced former CEO Christopher Luxon, now the Prime Minister of New Zealand. He previously served as CEO of Walmart’s US operations and held senior positions at Woolworths in Australia.
The reporter travelled as a guest of Air New Zealand.
Simon Russell
says:Air NZ? – in the worst condition it has ever been, IMHO. Hollowed out, cosmetic window-dressing changes, structurally weak and prone to hostile competition. A sad day for a once great airline.